Why your division heads matter most when it comes to organisational change
Nothing budges without first being nurtured, nudged, pushed, or prodded by the business leadership
Many senior executives believe that organisational change must be driven from the top down. Yet others argue for a bottom-up approach, with change initiatives being pushed organically by employee teams on the front lines.
The C-suite often gets the most praise for an organisation’s success, while team leadership is typically lauded as the foundation for getting work done. Yet our data clearly shows that the most important role for implementing change lies with the business unit leaders, or divisional heads. In our research, studying nearly one million employees involved in change initiatives at 150 global corporations, we identified 10 major drivers of successful change.
These include vision and direction, communication, business and team leadership, skills and staffing, systems and processes, accountability, and a broad range of emotions. Of those drivers, we found that business leadership has, by far, the most significant impact on business performance (e.g. improvements in effectiveness, customer service and cost management) as well as a substantial effect on benefits realisation. In addition, all of the other major drivers of change are themselves driven either primarily or indirectly by business leadership.
Thus, in essence, nothing budges without first being nurtured, nudged, pushed, or prodded by the business leadership. Think of it this way: business leaders are the linchpin that connects the top and bottom of the organisation. From the top down, they translate the corporate vision into terms that staffers can understand and, more importantly, embrace. And from the bottom up, they ensure that the teams below them are well led, receive the communication they need, and have the accountability, positive emotions and resources necessary to do their jobs well.
To drive change forward, the C-suite must ensure the right individuals are in place at the business leadership level. Business leaders require a complex set of skills for working with team leaders, with entire teams at another level, and with the C-suite at yet another level where they must negotiate to get people the resources they need. Specifically, business leaders need to not only explain but communicate the vision inspirationally to many audiences, across many different contexts, and in myriad ways, constantly keeping the communication about the vision and direction up to date to gain people’s buy-in.
In doing so, they must answer the key question, “How will everyone be better off after all this?” When the business leadership has done its job well, all teams will be aligned with everyone pointed in the same direction, all headed toward a common purpose. That is, team goals, roles and outputs will all be in sync with the overall organisational vision and direction. Moreover, people will be linked across and between groups, building strong value chains that connect employees, systems, and processes to business outcomes. It’s no wonder why the role of business leadership has such a powerful impact on the outcome of change programmes.
Unfortunately, the business leadership at many organisations is simply not up to the task of leading change. In those cases, the C-suite needs to work closely with the business unit leaders to build their capabilities and to establish a mindset where institutionalising the change is just as important as fixing day-to-day problems. Our research indicates that a 30 per cent to 40 per cent improvement in the level of business leadership is often required to bring change back on track. To achieve that, the C-suite must often replace those business leaders who have repeatedly had a subpar track record.
Effective business leaders are crucial to laying the foundation of an organisation’s change capability. Our data clearly shows that attaining the highest levels of business performance requires this core strength, enabling organisations not just to endure change but truly thrive on it. These high-performing businesses are faster and more responsive to unpredictable events in the environment, and that agility comes from a strong competence of managing change.
Indeed, if our research has taught us anything it is that the highest-performing organisations have the most change taking place at a fast pace, and that change is typically being driven by business leaders who keep their hands tightly on the wheel, quickly implementing one initiative after another while still staying in firm control of their organisation’s destiny.
Warren Parry is a managing director for Accenture Strategy